Will Indian Government Be Able To Provide Free Drugs?

As of now a staggering 78 percent of health expenditure in India is out of pocket – one of the highest out of pocket procurement numbers in the world and 72 percent of this is spent on drugs.

Goyal said a district-level state-of-the-art warehouse will be set up by states to store the drugs and a passport driven system will move the medicines to district hospitals, CHCs and PHCs will then send the drugs to the sub centres. 

He said “It is being made mandatory for all doctors in the public sector to prescribe generic drugs and salt names and not brands. Action will be taken against doctors found prescribing brands,” as reported by health.india.com.

A Planning Commission panel noted that drug prices have increased by 40 percent between 1996 and 2006. They also observed that while the drugs on the EDL rose by 15 percent the non-essential drugs increased by 137 percent. This clearly shows that proper legislation can keep the price of drugs down.

Further, the Commission observed that 39 million Indians were forced into poverty because of ill-health and the consequent treatment costs. About 30 percent in rural India didn’t go for any treatment for financial constraints in 2004. While, in urban areas 20 percent of ailments were untreated for financial problems the same year. About 47 percent and 31 percent of hospital admissions in rural and urban India, respectively, were financed by loans and sale of assets. 

Though monopoly and economies of scale will help government procure quality drugs at a cheaper rate, the states are expected to move towards an accountable system. One of the ways in order to make the system transparent is enactment of Transparency in Tender Act.